Why is financial selling getting worse--not better? Too many banks are pressing the 'easy button' and choosing cost efficiency over sales effectiveness.

• Author: Schneider, Jim

FOR ANY SALES ORGANIZATION IN A COMMODITY BUSINESS SUCH AS FINANCIAL SERVICES, the lure of greater efficiency and cost savings is powerful. It becomes almost addictive when combined with the seemingly endless efficiencies available through the use of the Internet, customer relationship management (CRM) and e-learning.

There is a growing tendency in many financial institutions to press the "easy button" for the sake of sales cost efficiency by relying solely on technology to solve every sales problem. And this choice is damaging sales competency and revenue growth. The halo effect for everything that is empowering about technology has led to serious missteps in selling.

Growth in sales revenue, or income, isn't yet the result of an "immaculate conception" where robotic, Internet-shopping customers meet computer-based trained employees at a CRM-predicted intersection of customer preference and an automated offer. It's the result of hard work in creating a preferred sales process, of dedicated sales leaders providing a narrow focus, coaching, encouragement and clear accountability. It is also a result of great sales and coaching conversations made possible by well-trained, well-defined and well-practiced social behavior.

It's time for banks to get back to the basics of creating income.

There is growing evidence of industry "pain"

After years of improving sales effectiveness, banks have begun to experience a slide in revenue and net income per employee. This is largely due to the global credit meltdown and increased regulation, but a look beneath the surface shows some troubling indicators of a decline in sales effectiveness.

The numbers we see at most organizations for services per household, share of wallet, cross-sales, sales cycle time for commercial calling, conversion rates on inquiries and profitability per sale have remained constant or have declined despite the many exciting new ways to access customer information and connect with prospects. CRM software providers such as MARQUIS find that some organizations now have as many as 63 percent single-product households. As an industry, we're losing share to other industries despite all of the buzz about becoming "trusted advisers?'

The American Customer Satisfaction Index shows that customer satisfaction has also declined since 2007. Studies in both the United States and Canada by J.D. Power & Associates, Bain & Co. and others also show declines in net promoter scores and increases in consumer defection rates to as much as 15 percent or more of the customer base per year. Loyalty has declined most among customers with the highest investible assets and with businesses that are most creditworthy.

Customer satisfaction scores are most significantly influenced at key moments of opportunity such as applying for a loan or opening a new account where advice and the quality of the sales experience make the most difference. Organizations known for their sales effectiveness, such as Wells Fargo & Co. and JPMorgan-Chase also consistently outperform their peers in customer satisfaction.

Looking deeper yet, the anecdotal evidence about sales and coaching behavior is also troubling.

In our telephone shops nationwide, scores have plummeted for fundamental sales behavior such as mentioning at least one benefit tailored to the caller; listening more than talking; making at least one statement to differentiate a product or company; and asking a caller for a specific next-step action.

Market data demonstrates that for some organizations the loan balances their customers hold at other institutions are 10 times the loan balances their customers have with them, yet lenders aren't working their own customer base very hard. Business bankers and consumer lenders seem to be using stringent underwriting standards as an excuse not to call aggressively on a more narrowly focused prospect list of qualified borrowers. The number of completed sales calls is down, and there's less effort to cross-sell commercial relationships or to solicit the personal assets of company officers.

Almost half of all branch salespeople in large banks believe...